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Dine Brands Global, Inc. (DIN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $216.2M, Adjusted EPS $0.73, and Adjusted EBITDA $49.0M; Applebee’s comps were +3.1% while IHOP comps were -1.5% .
  • Results came in below consensus: revenue $216.2M vs $220.6M*, Adjusted EPS $0.73 vs $0.99*, and EBITDA $49.0M vs $55.2M*; higher G&A and lower segment profit drove the miss . Values retrieved from S&P Global.
  • Capital return pivot: dividend cut from $0.51 to $0.19 per quarter and commitment to repurchase at least $50M of shares over the next two quarters; management cited undervaluation and buybacks as the more accretive lever .
  • Strategic momentum: dual-brand conversions are accelerating (≈30 opened/under construction in 2025; ≥50 openings in 2026), with strong early economics and franchisee enthusiasm .
  • Near-term setup: guidance maintained with EBITDA likely at the low end due to temporary remodel/conversion closures; Applebee’s sales sustained into Q4 and IHOP has accelerated .

What Went Well and What Went Wrong

What Went Well

  • Applebee’s achieved a second straight quarter of positive comps (+3.1%) with positive traffic; menu innovation (Chicken Parmesan Fettuccine) and the Ultimate Trio appetizer drove transactions and check growth, and off-premise sales rose +9% YoY .
  • Dual-brand strategy showed compelling economics (1.5x–2.5x sales lifts, near doubling of four-wall margins, sub-three-year paybacks), with ~30 domestic units opened/under construction by year-end and ≥50 planned in 2026 .
  • Asset-light cash generation remains strong: YTD operating cash flow $83.3M and adjusted free cash flow $68.2M, supporting buybacks and reinvestment, while unrestricted cash ended Q3 at $168.0M .

What Went Wrong

  • Consolidated profitability compressed: Adjusted EBITDA fell to $49.0M from $61.9M YoY, and Adjusted EPS declined to $0.73 from $1.44, driven by higher G&A and lower segment profit; temporary closures for remodels and dual-brand conversions also pressured results .
  • IHOP comps were -1.5% amid elevated commodities (eggs, pork, coffee); value mix grew, requiring barbell initiatives to lift check (weekday value incidence reduced from ~25% to ~15%) .
  • Company-owned restaurants remained a drag (expected ~$9–$10M segment profit hit in 2025), reflecting liquor license gaps, construction downtime, and catch-up repair/training costs; management expects these to abate as conversions/licensing complete .

Financial Results

Consolidated P&L Trend (Reported Quarterly)

MetricQ1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$214.8 $230.8 $216.2
GAAP Diluted EPS ($)$0.53 $0.89 $0.48
Adjusted Diluted EPS ($)$1.03 $1.17 $0.73
Adjusted EBITDA ($USD Millions)$54.7 $56.2 $49.0
G&A Expenses ($USD Millions)$51.3 $50.8 $50.2

Q3 2025 vs Prior Year and vs Consensus

MetricQ3 2024Q3 2025 Consensus*Q3 2025 Actual
Total Revenues ($USD Millions)$195.0 $220.6*$216.2
Adjusted Diluted EPS ($)$1.44 $0.99*$0.73
Adjusted EBITDA ($USD Millions)$61.9 $55.2*$49.0

Values retrieved from S&P Global.

Margins (Calculated from reported figures)

MarginQ1 2025Q2 2025Q3 2025
Adjusted EBITDA Margin (%)25.5% 24.4% 22.7%

Note: Margins are calculated from reported revenue and Adjusted EBITDA.

Segment/Brand KPIs

KPIQ1 2025Q2 2025Q3 2025
Applebee’s Domestic Same-Restaurant Sales %-2.2% +4.9% +3.1%
Applebee’s Off-Premise Mix (% of sales)23.5% 22.0% 22.9%
Applebee’s Off-Premise Avg Weekly Sales per Restaurant ($)~$12,800 ~$12,800 ~$12,000
IHOP Domestic Same-Restaurant Sales %-2.7% -2.3% -1.5%
IHOP Off-Premise Mix (% of sales)21.2% 20.0% 20.4%
IHOP Off-Premise Avg Weekly Sales per Restaurant ($)~$7,700 ~$7,600 ~$7,500
Fuzzy’s Domestic Same-Restaurant Sales %-12.2% -11.8% -1.5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Applebee’s Domestic System-wide CompsFY2025+1% to +3% (updated in Q2) +1% to +3% (maintained) Maintained
IHOP Domestic System-wide CompsFY2025-1% to +1% (updated in Q2) -1% to +1% (maintained) Maintained
Consolidated Adjusted EBITDAFY2025$220M–$230M (updated in Q2) $220M–$230M; expect low end Maintained (low end expected)
G&A ExpensesFY2025$205M–$210M (updated in Q2) $205M–$210M (maintained) Maintained
Capital ExpendituresFY2025$30M–$40M (updated in Q2) $30M–$40M (maintained) Maintained
Quarterly DividendQ3 2025 (declared)$0.51/share ——
Quarterly DividendQ4 2025 (declared)—$0.19/share Lowered
Share RepurchasesNext 2 quarters—≥$50M planned Initiated/Expanded

Earnings Call Themes & Trends

TopicQ1 2025 (Prior-2)Q2 2025 (Prior-1)Q3 2025 (Current)Trend
Everyday Value & Menu InnovationApplebee’s value mix rose to 34%; Bourbon Street items drove traffic; IHOP House Faves launched; focus on core breakfast Applebee’s comps +4.9% on value pipeline; IHOP expanding House Faves and barbell to lift check Applebee’s comps +3.1%; Chicken Parm Fettuccine and Ultimate Trio drove transactions/check; IHOP weekday value incidence fell to ~15% with barbell upsell Positive execution; value remains central
Off-PremiseApplebee’s off-premise +3.7%; strategy via national campaigns Off-premise +7.6%; ~22% mix Off-premise +9%; Applebee’s mix 22.9%; IHOP 20.4% Building momentum
Dual-Brand StrategyDomestic prototype success in Seguin; 3x sales vs standalone; pipeline forming Second domestic unit; pipeline oversubscribed for 2026; aiming ≥12 dual brands in 2025 ~30 open/under construction by YE; ≥50 openings in 2026; 1.5x–2.5x sales lifts; margins nearly double Accelerating
Supply Chain & Commodities/TariffsTariffs fluid; limited international sourcing; eggs elevated Applebee’s commodities flat to slightly down; IHOP mid-single-digit increase (eggs, coffee); CSCS savings >$35M Applebee’s ~flat; IHOP mid-single-digit up (eggs, pork, coffee); CSCS savings >$42M; tariffs still fluid Mixed inflation; mitigation ongoing
Company-Owned PortfolioStrategic ownership to improve brands; early remodels; refranchise plan in ~3 years 70 units operated; near system-average performance; investments to remodel/convert Drag from licenses/closures; expected ~$9–$10M segment hit in 2025; sequential comp improvement; early dual-brand conversion ~4x sales Transitional headwinds; improving
Applebee’s Remodel ProgramNew package early trials, ROI supportive >100 remodels targeted; nine of top ten franchisees accelerating ~80 completed to date; double-digit lifts in company portfolio; target two-thirds renovated by end-2027 Expanding

Management Commentary

  • “In the third quarter, Dine Brands sustained positive sales and traffic trends, driven by our everyday value platforms, innovative new menu offerings, and high-impact marketing that continues to resonate with guests.” — John Peyton, CEO .
  • “We believe our shares are undervalued… we plan to repurchase at least $50 million of shares over the next two quarters.” — Vance Chang, CFO .
  • On dual-brand economics: “Sales performance approximately 1.5x to 2.5x higher post-conversion… four-wall margins nearly doubling… payback period of less than three years.” — John Peyton .
  • On Q4 outlook: “Sales volume for Applebee’s really sustained from Q3 into Q4, and then it’s accelerated for IHOP from Q3 into Q4.” — Vance Chang .

Q&A Highlights

  • Company-owned restaurants: management expects ~$9–$10M segment profit hit in 2025 from licenses, construction closures, and catch-up expenses; headwinds should abate next year as transitions complete .
  • IHOP check strategy: barbell approach and upsell have reduced weekday value incidence from ~25% to ~15%, improving check while retaining traffic .
  • Dual-brand trajectory: ~30 domestic units open/under construction by YE 2025; ≥50 in 2026; franchisee demand strong with conversions leading near-term .
  • Capital returns: dividend reduced to $0.19/share and buybacks increased due to perceived undervaluation; target share count reduction ~11–13% over two quarters at current prices (management commentary) .

Estimates Context

  • Q3 2025 consensus vs actual: EPS $0.99* vs $0.73 Adjusted, revenue $220.6M* vs $216.2M, EBITDA $55.2M* vs $49.0M Adjusted — all below expectations. Primary EPS and EBITDA definitions may differ vs company’s non-GAAP metrics; comparison shown to Adjusted figures given investor focus .
  • Next quarter (Q4 2025) consensus: EPS $1.09*, revenue $226.5M*; management noted sustained Applebee’s sales and IHOP acceleration into Q4 .
  • Targets and coverage: Target price consensus ~$27*, with 6–7 estimates on EPS and 5–6 on revenue for Q3–Q4*. Values retrieved from S&P Global.
MetricQ3 2025 Consensus*Q3 2025 ActualQ4 2025 Consensus*
Primary EPS ($)0.99*0.73 1.09*
Revenue ($USD Millions)220.6*216.2 226.5*
EBITDA ($USD Millions)55.2*49.0 54.9*
EPS # of Estimates6*—7*
Revenue # of Estimates5*—6*
Target Price ($)27.0*—27.0*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term print was a modest miss vs consensus driven by higher G&A and lower segment profit; expect Q4 EBITDA at the low end of the annual range due to elevated temporary closures for remodels and dual-brand conversions .
  • Capital allocation pivot (dividend reduction; ≥$50M buybacks) is a tangible catalyst; buyback pace suggests meaningful share count reduction if valuation remains depressed .
  • Applebee’s momentum is intact (positive traffic and comps; off-premise strength), while IHOP is showing positive traffic and improving check via barbell strategy; monitor Q4 comps to confirm trajectory .
  • Dual-brand strategy is gaining scale with attractive unit economics and franchisee demand; watch 2026 build cadence and early U.S. conversion returns to gauge medium-term growth and margin accretion .
  • Commodity backdrop mixed (IHOP mid-single-digit inflation; eggs/pork/coffee elevated) but co-op savings progressing; continued tariff fluidity is a risk to input costs .
  • Company-owned portfolio headwinds are transitory (licenses, closures); as conversions/remodels complete, segment drag should lessen and refranchising pathway may unlock value .
  • Trading lens: the buyback/dividend mix shift and improving brand traffic are supportive; execution on Q4 comps and visibility on 2026 dual-brand openings are key narrative drivers.
Note: All company figures and narrative sourced from Q3 2025 press release and 8-K, Q3 earnings call, and prior quarter releases/calls. Consensus figures marked with * are from S&P Global.

References:

  • Q3 2025 press release and financials:
  • Q3 2025 8-K (Item 2.02 and Exhibit 99.1):
  • Q3 2025 earnings call transcript:
  • Q2 2025 press release:
  • Q2 2025 call transcript:
  • Q1 2025 press release:
  • Q1 2025 call transcript:
  • Dividend press release (Q3 declared):
  • Consensus estimates: Values retrieved from S&P Global.